Identify the stages in the phase model of globalization, and
explain the level of risk (disadvantages) inherent in each
There are four general phases of globalization, but all companies don’t
necessarily use these methods as steps to become a global company.
A company may decide that it will expand from operating in the local market
into new markets in the world. So, they start by exporting their products to
the new market, this will increase their production, this usually means more
profits. As the local market will still be supplied, plus the income from the
new market. There are also some disadvantages to exporting that are usually
encountered, and these can make it very expensive and not at all profitable.
Importing countries can make it very difficult for the exporter, as they have
the power to decide if to place a tax on the imported item especially if the
importing country already has a local supplier. This is done to cause the
prices of the imported item to be more expensive than the local item. The
cost of shipping the products already makes the margin of profit lower.
